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History

Guararapes’ history began in 1947, when the brothers Nevaldo and Newton Rocha opened their first clothing store called "A Capital", in Natal, Rio Grande do Norte. Four years later, the company installed a small garment industry in Recife, Pernambuco, and acquired several retail outlets at a time when the Northeast clothing market was beginning to expand.

In October 1956, the brothers founded Guararapes in Recife, transferring its headquarters to Natal two years later with the inauguration of its first factory, with 2,700 m² of built-up area. It is still there to this day.

The company went public at the beginning of the seventies and built factories in Fortaleza, Ceará and Mossoró, Rio Grande do Norte in 1976. In the same year, the Super G retail chain opened for business.

In 1979, Guararapes acquired the Riachuelo and Wolens stores, expanding its operations into retail fabrics, which has been responsible for most of the Group’s current growth. In the same year, the company inaugurated Guararapes Têxtil in Natal, with 40,000 m² of built-up area.

The brainchild of Flávio Rocha, the company launched the Pool brand in 1982, which targeted young people and became a fashion icon in the eighties. It was also the main sponsor of racing driver Ayrton Senna in his early career when he competed in the Kart and F-3 categories.

In 1997, the Natal manufacturing facility was expanded and transferred to the industrial district of Extremoz, Rio Grande do Norte. With a built-up area of 50,000 m², it was responsibility for producing the Group’s knitwear, as well as some of its shirting. The three Fortaleza units produced woven fabrics (serge, jeanswear and shirting).

The Group has been investing in research, creation, development and the distribution process in order to evolve its integrated model so as to improve the timing between product conception and store deliveries. In order to do so, the Group maintains three distribution centers: one in Extremoz, inaugurated in 2000, with 58,000 m²; one in Guarulhos, São Paulo, inaugurated in 2002, with 85,000 m²; and the third in Manaus, Amazonas, with 6,000 m².

In addition to Riachuelo, the Group owns Midway Financeira, Shopping Midway Mall and Transportadora Casa Verde.

In 2005, Guararapes began focusing more intensely on Riachuelo, which has been absorbing 100% of the Company’s output since 2008.

In addition to the retail/garment industry integration, financing is also managed in an integrated manner as the Company strives to obtain the maximum from its operations. In fact, it is the only player to integrate the three pillars of its business: retail, industry and financing.

Timeline

Riachuelo Stores

Riachuelo was founded in 1947 as a chain of small street stores that sold fabrics at affordable prices. In 1979, it was acquired by Guararapes, which embarked on a corporate restructuring process and initiated a strategic change of direction towards apparel sales.

As of 1993, it began to focus on fashion. Always in tune with the latest national and international trends, Riachuelo offers superior quality at affordable prices, a strategy that involved developing and strengthening its private labels, each with its own visual identity and target audience.

With a nationwide presence, Riachuelo has stepped up its expansion pace in recent years. Between 2005 and 2009, it opened eight to ten stores per year; in 2010, however, it began to accelerate, opening 16 stores, followed by another 22 in 2011 and 24 in 2012. Thirty-eight new stores have been confirmed for 2013, seven of which was inaugurated in April and May. We currently have a total of 176 stores and 428,661 m² of sales area.

Stores Map:

Midway Financeira

Midway Financeira was incorporated in January 2008 and began operating in July the same year to offer financing to consumers of the products and services of its parent company, Lojas Riachuelo, seeking the financial resources best suited to support these transactions.

Midway Financeira has recorded substantial figures since its inception, as it is responsible for managing a portfolio of more than 22 million Riachuelo Card holders and is currently the largest private label card issuer in Brazil. Through these cards, the group offers its clients interest-bearing installment sales, personal loans, cash withdrawals (Saque Fácil), three different types of insurance (unemployment, home and personal accident) and three types of assistance plans (home, vehicle and dental), in addition to card protection.

At the end of 2010, the Company began issuing branded cards in partnership with Visa and Mastercard. The business plan includes the issue of 1 million cards every 12 months.

Midway Mall and Private Properties

The Midway Mall is located at the most important junction in Natal (Rio Grande do Norte), formed by Avenida Senador Salgado Filho and Avenida Bernardo Vieira, two of the city’s main thoroughfares. It is also highly accessible, located only 15 minutes from the city’s main districts, ensuring that the entire city perimeter is within its catchment area.

Inaugurated on April 27, 2005, and currently with nearly all of its gross area leased, the mall comprises 231,000 m² spread over three floors, with 13 anchor stores, satellite stores, a food court and several service outlets. The third floor, expanded in 2010, includes a seven-screen movie theater (Cinemark), five new anchor stores, various satellite stores and a complete gourmet area with renowned city restaurants.

Also on the third floor, the Midway Mall houses the Teatro Riachuelo, the most modern and comprehensive performing arts venue in Brazil’s Northeast. Inaugurated in December 2010, it can hold up to 3,500 spectators, depending on its configuration. The project exemplifies the mall’s consolidation of leisure, entertainment and the arts, providing the public with a wide range of shows and performances, through a specialized management team in partnership with highly experienced segment operators.

Transportadora Casa Verde

Transportadora Casa Verde (TCV) is responsible for part of the Group’s logistics and, thanks to the investments in recent years, particularly in technology, TCV ensures that the Company’s products are delivered to the Riachuelo stores in a timely and efficient manner. At the end of 2012, TCV had 163 own trucks and 31 semi-trailers.

Company Profile

Guararapes is the largest fashion group in Brazil and the parent company of the Lojas Riachuelo retail chain, with 176 stores nationwide.

In the developed countries, large companies account for between 30% and 40% of the retail textile market, whereas in Brazil the sum of the biggest firms accounts for less than 10%. The main competitive advantage of small companies is the informality of their operations.

However, the big chains have been expanding thanks to scale gains, investments in product quality and their positioning as sellers of fashion, as well as their fast inventory turnover, allowing them to adapt rapidly to the season’s trends. Riachuelo not only adhered to the fast fashion concept, but also began forming partnerships with renowned Brazilian designers, including Oskar Metsavaht, Cris Barros, Pedro Lourenço, Thais Gusmão, André Lima, Huis Clos, Maria Garcia, Martha Medeiros, Juliana Jabour, Zapälla and Lorenzo Merlino.

In recent years, Guararapes has invested heavily in its support operations by modernizing its facilities, opening distribution centers in Natal and Sao Paulo and implementing information technology in the financial and operational management of its operations.

One of the Company’s most important advantages is the integration between its retail and manufacturing operations, a model that has proved highly successful since it permits a rapid response to changes in the market.

Last Update: May 10, 2013